Is Dreamworks Animation Skg Inc Facing a Flop?

There’s nothing quite like going to the theater and watching a movie on the big screen.

Dreamworks In The News

Dreamworks Animation Skg Inc (NASDAQ:DWA) is facing their second loss in three years due to missing box office forecasts for one of their biggest movies on the year, ‘How To Train Your Dragon 2.’ The film, which was released in theaters on June 13, is looking to generate $180 million in ticket sales in the United States and Canada, missing analysts’ consensus of $250 million.

A Financial Expert’s Opinion

On June 30, Piper Jaffray analyst James Marsh upgraded his rating for Dreamworks Animation Skg Inc (NASDAQ:DWA) from Underweight to Neutral and raised his price target from $19 to $22. He noted, “While we are still trimming expectations for How to Train your Dragon 2 and the upcoming Penguins film, we think the worst of negative earnings revisions are behind us at this stage.” Marsh has made six previous recommendations for Dreamworks, earning him a +44.5% average return on the stock.

Marsh’s Past Recommendations

Marsh has a history of making recommendations for stocks in the film industry, such as Carmike Cinemas, Inc. (NASDAQ:CKEC) and IMAX Corporation (USA) (NYSE:IMAX), helping him earn a +51.3% average return on all stocks and a 75% success rate in all recommendations.

On March 15, 2013, Marsh reiterated an Overweight rating for Carmike Cinemas and raised his price target from $17.50 to $20. He explained, “Carmike reported 4Q12 revenue of $147M (+22% YoY), just ahead of our estimate of $145M (consensus of $142M). Adj. EBITDA and EPS results of $30M/$0.43 were well ahead of our estimates of $24M/$0.27 and consensus of $27M/$0.26.” Since then, Carmike Cinemas has gone up from $16.70 to $35.13, helping him earn a +89.2% average return on the stock.

In addition, on January 4, 2014, Marsh reiterated an Overweight rating for Imax Corp, noting the company’s international-growth prospects in a note to clients. Since then, Imax has gone up from $18.78 to $28.48, helping Marsh earn a +73.3% average return on the stock.

On the other hand, Marsh has not always been so lucky with his recommendations. On December 6, 2013, Marsh issued a BUY rating for Lions Gate Entertainment Corp. (NYSE:LGF). Since then, Lions Gate has gone down from $30.56 to $28.58, contributing to his -6.5% average loss on the stock.

Conclusion

Most people love to go to the movies, but is it time to trust Marsh’s latest recommendation based off his financial advice history?

Carly Forster writes about stock market news. She can be reached at [email protected]